It’s fair to say that many of the property investors and letting agents in the British capital that have reason to request an inventory, mid-term review or new-build report in London from time to time won’t have found the most recent figures about the local rental market to be pleasurable reading.
The London buy-to-let market has been widely reported as sluggish, with better yields to be enjoyed at present in other parts of the UK – but is there hope of a turnaround in this anytime soon?
One letting agent in the capital, Benham and Reeves, has suggested so. In fact, it has said that the third quarter of 2018 was the busiest such period in its history, with tenant demand for London rental property significantly up.
What are the reasons for the agency’s optimism?
Benham and Reeves stated in its latest lettings report that agreement had been reached on more than 1,000 tenancies across its 16 London branches during the three months. This represented a 22.1% rise from the transaction volumes seen during the equivalent period of 2017.
Furthermore, the agency registered an average of 22 applications for each available property during the third quarter, as opposed to 16 a year earlier.
Such figures mean that while London rent prices are mostly, as the letting agent admits, “flat”, it “sees this trend changing in the next 12 months” – an indication that sustained high demand for rental accommodation in the city will start to push up values.
Furthermore, the agent said that “from small units to large, from new build apartments to period, basement properties, demand has been high across the board, and at every price point.”
Hope that London rental yields could once again be on the up
It isn’t only Benham and Reeves that is confident of an improving picture for London landlords and investors, as Doug Shephard of the property search site Home.co.uk has suggested that yields could already be increasing again in the capital.
He explained: “During London’s recent property boom, house prices soared ahead of rents. Investment fever drove prices up more than 50% in just five years. Meanwhile, rents rose only 10% over the same time period, causing yields to collapse.”
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